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Monsey energy co. paying $1.25M to cover fraud: officials

A Monsey-based energy company accused of ripping off customers by falsely promising lower rates is being forced to repay $1.25 million to 25,000 customers, the state attorney general said. HIKO Energy LLC promised lower costs but customers saw electricity bills soar.

HIKO reaches agreement with AG to reimburse 25,000 customers.

MONSEY – A Monsey-based energy company accused of ripping off people by falsely promising lower rates is being forced to repay $1.25 million to 25,000 customers, the state attorney general said Monday.

After an the introductory rate, customers of HIKO Energy LLC saw their electricity bills soar, the AG said in a news release.

The settlement amount, which includes fines, resulted from an investigation by the office's Consumer Protection Bureau. The office found HIKO lured consumers with false promises of lower rates of 10 to 15 percent and then fleeced them with much higher bills. The company also enrolled customers without their knowledge or consent, and made it difficult for them to cancel their enrollments in a timely manner, Attorney General Eric Schneiderman said.

HIKO also faces new restrictions on its marketing practices to prevent future frauds, he said.

Those eligible for restitution bought HIKO energy products between June 1, 2011 to October 1, 2014. All consumer claims seeking restitution must be received by Aug. 15.

HIKO got targeted as part of an investigation into alleged deceptive practices by energy service companies, which purchase energy on the open market and then sell it to consumers. The campaign has returned millions of dollars to consumers, including nearly $2 million to Columbia Utilities Power LLC as part of a 2011 settlement, Schneiderman said.

The attorney for HIKO, Motty Shulman, said company officials, including CEO Harvey Klein, had no comment.

The company runs sales and management offices at 12 College Road. It incorporated Jan 14, 2010, with the registered agent, Boruch Gottesman of Premier Energy Services of Monsey, according to the state Department of State website of businesses.

HIKO lawyers responded in court papers that the company's agreement with customers makes it clear that rates "would be variable and subject to market-related factors." The company also said that the plaintiffs did not represent the majority of their customers.

People seeking a share of the restitution under the settlement with the AG can submit a claim online at go.bbb.org/ny-hiko, or call 212-358-2857 to have a claim form sent to them.